Chalmers' Corner Turned: Inflation Surges as Domestic Pressures Bite

Treasurer Jim Chalmers made a bold statement in March last year that Australia's economy had turned a corner. However, the opposite appears to be true.

The inflation rate has surged from 2.4 per cent in March to over 4 per cent in September and remains high. The Australian Bureau of Statistics says the single largest contributor to the August CPI rise was the cost of housing, which was up by 5.7 per cent.

Chalmers blamed much of the inflation on the impact of the Middle East conflict on petrol prices, but the ABS data suggests this is not the main cause. Reserve Bank Governor Michele Bullock said that 'inflation is too high and has been driven by domestic capacity pressures'.

Economists suggest that the government could save billions by cutting back on generous incentives for home batteries and EVs, cracking down on blow-outs in defence contracts, and reducing the growing public service. A growing number of people within Labor are accepting that these measures must be taken to get the economy back on track.